RBI Sets Underwriting Commission for 2040 and 2065 Bonds

India’s central bank has announced underwriting commission rates for upcoming government bond issuances, a critical step in managing long-term debt instruments. For the 2065 maturity bonds, the commission has been set at ₹0.0119 per ₹100, while for the 2040 maturity bonds, the rate is ₹0.0107 per ₹100.

Underwriting commissions are paid to primary dealers who guarantee the subscription of government securities, ensuring smooth issuance even during volatile market conditions. By setting these rates, the RBI aims to balance costs for the government while incentivizing dealers to participate actively in auctions.

Market analysts note that these long-dated bonds are significant for India’s debt management strategy, offering stability and predictable returns for institutional investors. The move also reflects RBI’s cautious approach to maintaining liquidity and investor confidence amid global uncertainties.

Key Highlights

• 2065 Bonds: Commission fixed at ₹0.0119 per ₹100.
• 2040 Bonds: Commission fixed at ₹0.0107 per ₹100.
• Purpose: Incentivize primary dealers, ensure smooth bond issuance.
• Impact: Supports India’s long-term debt management strategy.
• Investor Takeaway: Attractive for institutions seeking stable, long-duration returns.

Sources: Business Standard, Economic Times, Mint